Tuesday

17th Oct 2017

Investigation

Part I: From Peppi’s to Barroso’s

  • Peppi's Kiosk in Sliema, Malta (Photo: EUobserver)

Out on €100,000 bail and risking a 10-year prison sentence, 50-year old Silvio Zammit pulls on his cigarette and looks out onto St Julian’s Bay from the terrace of his small restaurant, Peppi’s, on the northern coast of Malta.

He points to the stone walls that separate the sea from Sliema’s string of soulless residential buildings.

Thank you for reading EUobserver!

Subscribe now for a 30 day free trial.

  1. €150 per year
  2. or €15 per month
  3. Cancel anytime

EUobserver is an independent, not-for-profit news organization that publishes daily news reports, analysis, and investigations from Brussels and the EU member states. We are an indispensable news source for anyone who wants to know what is going on in the EU.

We are mainly funded by advertising and subscription revenues. As advertising revenues are falling fast, we depend on subscription revenues to support our journalism.

For group, corporate or student subscriptions, please contact us. See also our full Terms of Use.

If you already have an account click here to login.

As a teenager, he tagged the walls with slogans in support of Malta’s former governing party.

“My life, my friends, my family are all in the Nationalist Party,” he tells EUobserver.

“We are friends and we share the same political views and ideology,” he says of John Dalli - a Nationalist Party politician and a former EU health commissioner who lost his job in a 2012 tobacco lobbying scandal.

Zammit is forbidden from speaking about the case directly because it is sub judice.

But recalling the years before the scandal, he says his personal life was bound up with his wife and sons and with local politics.

He was born just 100 metres away from Peppi’s, in a corner house where there now stands a new building with the word “serenity” stencilled on a plaque by the front door.

In the 1990s, he turned the family-run bakery into a grill and cafe which caters mostly to budget-conscious British tourists. Peppi’s serves a full English breakfast from morning to night for under €10.

Apart from Peppi’s, he is a sometime circus impresario. He also used to run a small gambling agency, but he lost his licence in relation to the Dalli affair.

By his own admission, he did not complete his secondary school education and he has trouble forming complex sentences in written or spoken English.

But he has been active in politics in Malta - a Mediterranean micro-state of just 420,000 people where everybody knows everybody else - since he was just 13.

He briefly became deputy mayor of Sliema, the town which covers St Julians Bay. But he stepped down from the post the same day Dalli left office in Brussels on 16 October 2012.

Original sin

Zammit’s direct role in what later came to be called “Dalligate” began at a lunch in Stockholm in October 2011 with two lobbyists from Estoc - the European smokeless tobacco council, an umbrella organisation which represents makers of mouth tobacco, commonly known by its Swedish name “snus”.

They also believed Zammit and Dalli were “friends”.

The lunch set in motion a series of events which is still playing out in the EU institutions and in courts in Malta and Luxembourg.

Snus is finely ground tobacco stuffed loose in small sachets and placed between the gum and the lip.

Due to restrictive EU laws, it can only be sold in Sweden.

Pro-snus EU lobbying was dealt a severe blow in 2004 when the EU court in Luxembourg ruled that the ban should be kept in place.

But the producers never gave up hope of unlocking the wider EU market - worth an estimated €500 million a year.

In 2008, the main European manufacturer, Swedish Match, even created a joint venture - SMPM International - with the world’s largest tobacco firm, Philip Morris, with a view to future EU expansion.

With Zammit’s “friend” Dalli in charge of overhauling EU tobacco laws, EU investigators say Swedish Match and Estoc saw a new window of opportunity.

They allege that Zammit and Gayle Kimberley, his associate and a former EU official, solicited first €60 million from Swedish Match then €10 million from Estoc in return for the commissioner’s influence.

They also say that whether Dalli was in on the scheme or not, he knew what they were doing and did nothing to stop it.

The money was never paid.

Instead, the snus makers tipped off Olaf, the EU’s anti-fraud office, about the attempted bribe.

Olaf launched an investigation and found “unambiguous and converging circumstantial pieces of evidence” - enough, in any case, for Dalli’s boss, the then European Commission chief, Jose Manuel Barrosso, to call for Dalli’s head.

Maltese police later started its own probe.

Zammit was arrested and is now on trial, charged with bribery and with trying to influence Dalli. The investigation into the former commissioner is ongoing. But Kimberley is free and has largely escaped scrutiny.

Lurid affair

For their part, Zammit and Dalli say they are innocent.

Dalli also claims that he is the victim of a plot - orchestrated by the tobacco industry, EU officials, and Olaf - to get rid of him in order to delay and weaken his tough new Tobacco Products Directive.

He has challenged what he calls his dismissal from his European post in the EU court in Luxembourg.

The affair - already three years in the making - has brought to light: leaks; false testimony; alleged illegal "wire-taps"; EU conflicts of interest; shady political deals in Malta; an evangelical scam artist in the Bahamas; and adultery.

Some facts not included in Olaf’s leaked report and new email evidence obtained by EUobserver appear to back Zammit’s version of events and point the finger of blame at Kimberley.

Meanwhile, EU sources have shed new light on Olaf's battle with the European Parliament and with the anti-fraud body's own supervisors.

It is a scandal which, according to one senior MEP, will haunt the EU institutions and Barroso for the next 10 years.

Part II - Malta's 'Mr Teflon' - will be published on Tuesday 4 November

Part V: Dalli’s big tobacco theory

John Dalli claims that his tough stand against tobacco as EU health commissioner led the industry to pull levers inside the European Commission to get him ousted from office.

EU smoke & mirrors

EUobserver reporter Nikolaj Nielsen sheds new light on the Dalli lobbying scandal, which, by Barroso's own admission, threatened to bring down the EU executive, but which is not over yet.

Court testimony implicates former EU health chief

The head of the EU’s anti-fraud office told a Maltese court on Tuesday that a former EU health chief - John Dalli - "tried to push" for the lifting of a ban on mouth tobacco.

Part II: Malta's 'Mr Teflon'

Part II of VIII: Prince William peers out of a black stretched luxury car as the vehicle turns down a street in Malta’s capital city, Valletta.

EU smoke & mirrors

EUobserver reporter Nikolaj Nielsen sheds new light on the Dalli lobbying scandal, which, by Barroso's own admission, threatened to bring down the EU executive, but which is not over yet.

Stakeholders' Highlights

  1. International Partnership for Human RightsEU Should Seek Concrete Commitments From Azerbaijan at Human Rights Dialogue
  2. European Jewish CongressEJC Calls for New Austrian Government to Exclude Extremist Freedom Party
  3. CES - Silicones EuropeIn Healthcare, Silicones Are the Frontrunner. And That's a Good Thing!
  4. EU2017EEEuropean Space Week 2017 in Tallinn from November 3-9. Register Now!
  5. European Entrepreneurs CEA-PMEMobiliseSME Exchange Programme Open Doors for 400 Companies Across Europe
  6. CECEE-Privacy Regulation – Hands off M2M Communication!
  7. ILGA-EuropeHealth4LGBTI: Reducing Health Inequalities Experienced by LGBTI People
  8. EU2017EEEHealth: A Tool for More Equal Health
  9. Mission of China to the EUChina-EU Tourism a Key Driver for Job Creation and Enhanced Competitiveness
  10. CECENon-Harmonised Homologation of Mobile Machinery Costs € 90 Million per Year
  11. ILGA-EuropeMass Detention of Azeri LGBTI People - the LGBTI Community Urgently Needs Your Support
  12. European Free AllianceCatalans Have Won the Right to Have an Independent State

Latest News

  1. Malta shocked after car bomb kills crusading journalist
  2. Spanish and Catalan leaders continue stand-off
  3. May pleads for more as EU makes Brexit gesture
  4. EU united in backing Iran deal, after Trump criticisms
  5. 'Think of the patients!' cry warring EMA-host cities
  6. In Iceland: Europe woos Arctic allies
  7. Austrian voters reject liberal pro-EU status quo
  8. Turkey urges EU not to break off ties

Stakeholders' Highlights

  1. ECR GroupBrexit: Delaying the Start of Negotiations Is Not a Solution
  2. EU2017EEPM Ratas in Poland: "We Enjoy the Fruits of European Cooperation Thanks to Solidarity"
  3. Mission of China to the EUChina and UK Discuss Deepening of Global Comprehensive Strategic Partnership
  4. European Healthy Lifestyle AllianceEHLA Joins Commissioners Navracsics, Andriukaitis and Hogan at EU Week of Sport
  5. Nordic Council of MinistersNordic Council Representative Office Opens in Brussels to Foster Better Cooperation
  6. UNICEFSocial Protection in the Contexts of Fragility & Forced Displacement
  7. CESIJoin CESI@Noon on October 18 and Debate On: 'European Defence Union: What Next?'
  8. Nordic Council of MinistersNordic Innovation House Opens in New York to Support Start-Ups
  9. ILGA EuropeInternational Attention Must Focus on LGBTI People in Azerbaijan After Police Raids
  10. European Jewish CongressStrong Results of Far Right AfD Party a Great Concern for Germans and European Jews
  11. EU2017EEEU Finance Ministers Agreed to Develop New Digital Taxation Rules
  12. Mission of China to the EUGermany Stands Ready to Deepen Cooperation With China